If not on a fixed-term loan, the hikes to the base rate since the end of 2021 will have taken a notable toll on even very wealthy borrowers. With less time to spread out increased costs on an already large mortgage, some HNWIs will be struggling to make repayments.
Again, the complicated nature of their finances and investments comes into play. HNWIs might be asset-rich (owning all manner of assets) but have limited access to liquid cash.
Seeing their mortgage repayment skyrocket will require them to release equity from other investments or access cash from other sources.
As with the application process, it is important that preconceptions do not cloud the due attention that HWNIs require. Those lenders and brokers who are used to operating in this space will likely be acutely aware of this point.
Improving support for HNWIs
Butterfield Mortgages recently conducted a survey of mortgage customers in the UK. It revealed that just 44 per cent of borrowers feel they have received satisfactory guidance and communication from their mortgage providers since the initiation of the interest rate hiking cycle in December 2021.
This underscores the importance of lenders working with borrowers to recognise potential issues as they arise and, whenever possible, bringing forward solutions.
The necessity for this aid extends to HNWIs regardless of their affluence, and lenders must be unwavering in their dedication to aiding borrowers who need to continue to invest in property with a sense of assurance.
Alpa Bhakta is the chief executive of Butterfield Mortgages
